The ITO, Ward-9(1), Ahmedabad V. M/s. Tarnetar Corporation, Ahmedabad

ITA 2447/AHD/2010

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6415 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 04-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K VOHRA
• Keywords: Value adopted by valuation officer
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND A. N. PAHUJA, AM) ITA NO. 2447/AHD/2010 A. Y.: 2006-07 THE INCOME TAX OFFICER, WARD 9 (1), AHMEDABAD, A BLOCK, INCOME TAX OFFICE, OPP. POLYTECHNIC, AMBAWADI, AHMEDABAD VS M/S. TARNETAR CORPORATION, SUKHSAGAR TENEMENT SOCIETY, VINZOL CROSSING, B/H. S. L. M. MANIKLAL, DHANPLAESHWAR SOCIETY, VINZOL, AHMEDABAD PA NO. AAEFT 0632 R (APPELLANT) (RESPONDENT) APPELLANT BY SHRI R. K. VOHRA, SR. DR RESPONDENT BY NONE O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-XV , AHMEDABAD DATED 04 TH MAY,2010, FOR ASSESSMENT YEAR 2006-07 ON THE FOLLO WING GROUNDS: 1. THE LD. COMMISSIONER OF INCOME-TAX (A)-XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN ALLOWING DEDUCTION U/S 80 IB (10) OF THE ACT AMOUNTING TO RS.1,02,69,964/- WHICH WAS DISALLOWED BY THE ASSESSING OFFICER. 2. THE LD. COMMISSIONER OF INCOME-TAX (A)-XV, AHMEDABAD HAS ERRED IN HOLDING THAT THE ASSESSEE FULFILLS THE CONDITIONS LAID DOWN FOR CLAIMING DEDUCTION U/S. 80IB (10) EVEN WHEN THE LAND WAS IN ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 2 THE NAME OF SOCIETY AND THE ASSESSEE HAD MERELY EXECUTED A WORK OF CONTACTOR. 2. WE HAVE HEARD THE LEARNED DR AND PERUSED THE FIN DINGS OF THE AUTHORITIES BELOW. HOWEVER, NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE SERVICE OF NOTICE. THE ASSESSEE IS , THEREFORE, PROCEEDED EX-PARTE. 3. THE ONLY ISSUE INVOLVED IN THE PRESENT APPEAL IS REGARDING DEDUCTION CLAIMED U/S 80 IB (10) OF THE IT ACT. THE AO DISALLOWED THE CLAIM OF THE ASSESSEE ON THE FOLLOWING GROUNDS: (1) THE ASSESSEE IS NOT OWNER OF THE LAND. THE LAND WAS PURCHASED BY THE COOPERATIVE HOUSING SOCIETY. (2) THE ASSESSEE HAD NOT TAKEN THE APPROVAL OF HOUS ING PROJECT FROM THE LOCAL AUTHORITIES. THE APPROVAL VI DE LETTERS DATED 30 TH DECEMBER, 2002 AND 31 ST DECEMBER, 2002 WERE ISSUED BY AHMEDABAD MUNICIPAL CORPORATION (IN SHORT AMC) TO THE SOCIETY (I.E. UTHKANTHESWAR COOPERATIVE HOUSING SOCIETY LTD.). (3) THE TERM DEVELOPER AND BUILDER WOULD MEAN THAT THE PERSON WHO IS ELIGIBLE FOR THE TAX BENEFIT WOULD BE THE PERSON WHO IS INVOLVED IN THE PROJECT FROM PURCHASE OF THE LAND TO THE SALE OF FINAL PRODUCTS I.E. HOUSE/F LATS. (4) THE ASSESSEE FIRM HAS ACTED MERELY AS AN AGENT AND A CONTRACTOR AS IT HAS ENTERED INTO CONSTRUCTION AGREEMENT WITH THE LAND OWNER. ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 3 (5) NO ASSESSEE CAN CARRY ON BUSINESS OF UNDERTAKIN G DEVELOPMENT AND BUILDING HOUSING PROJECT WITHOUT OWNING LAND. THE LAND IS AN INTEGRAL PART OF A HOUS ING PROJECT. A PERSON WHO DOES NOT HAVE LAND CANNOT BE TREATED AS A DEVELOPER, EXCEPT AS AN AGENT OF A CONTRACTOR. (6) THE AO HAS DENIED DEDUCTION U/S 80IB (10) OF TH E IT ACT ALSO ON THE GROUND THAT THE HOUSING PROJECT SHO ULD HAVE BEEN COMPLETED BEFORE MARCH, 2008 BUT THE ASSESSEE DID NOT COMPLETE BECAUSE THE BU PERMISSION WAS GIVEN ON 19-03-2009. 4. THE LEARNED CIT(A) NOTED THAT THE FIRST CONDITIO N FOR CLAIMING DEDUCTION U/S 80IB(10) OF THE IT ACT IS THAT THE UN DERTAKING SHOULD HAVE COMMENCED THE PROJECT AFTER 01-10-1998 AND COM PLETED THE PROJECT WITHIN 4 YEARS FROM THE END OF THE FINANCIA L YEAR IN WHICH THE HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITIE S IN CASE THE HOUSING PROJECT HAS BEEN APPROVED BY THE LOCAL AUTH ORITIES ON OR AFTER 01-04-2004. ACCORDING TO THIS CONDITION THE PROJECT SHOULD HAVE BEEN COMPLETED BY 31-03-2008. IN THE CASE OF THE ASSESSE E, THE DEVELOPMENT PERMISSION WAS GIVEN BY AMC DATED 30 TH DECEMBER, 2002. REGARDING TIME LIMIT, THE AO HAS NOT OBJECTED BUT HE HAS RAISED OBJECTION THAT APPROVAL OF THE PROJECT AND BU PERMI SSION WERE GIVEN BY THE LOCAL AUTHORITIES NOT TO THE ASSESSEE BUT IN THE NAME OF THE COOPERATIVE HOUSING SOCIETY. THE AO NOTED THAT THER E IS A COMPLETE IDENTITY BETWEEN THE UNDERTAKING AND THE ASSESSE E REFERRED TO IN THIS SECTION AND APPROVAL ETC. TO BE PROVIDED AS PE R LAW. IT WAS ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 4 SUBMITTED BEFORE THE LEARNED CIT(A) THAT THE ASSESS EE FIRM WAS ALLOWED DEDUCTION U/S 80IB (10) OF THE IT ACT IN TH E PRECEDING ASSESSMENT YEAR 2005-06. IT WAS ALSO EXPLAINED THAT THE LAND ON WHICH THE PROJECT WAS CONSTRUCTED WAS IN THE HANDS OF SUKHSAGAR COOPERATIVE HOUSING SOCIETY LTD. FOR LAST 15 YEARS, HOWEVER, TO RELIEVE THE MEMBERS OF THE SOCIETY AND TO ACQUIRE P OSSESSION OF THE LAND, THE ASSESSEE FIRM PAID PREMIUM OF RS.55,08,20 0/- TO THE OLD MEMBERS OF THE SOCIETY WHICH WAS ALLOWED AS DEDUCTI ON IN THE ASSESSMENT YEAR 2005-06. IT WAS SUBMITTED THAT THE ASSESSEE FIRM HAS PURCHASED READY MADE SOCIETY WITH LAND BY PAYIN G THE ABOVE AMOUNT. THE ASSESSEE FIRM INCURRED COST OF THE LAND FOR ALL PRACTICAL PURPOSES BECAUSE THIS ALONE GIVES IT THE RIGHT TO D EVELOP THE PROJECT ON THE SAID LAND. IT WAS FURTHER SUBMITTED THAT THE PARTNERS OF THE ASSESSEE FIRM PAID RS.9,26,030/- TO THE AMC FOR PAS SING OF PLAN OF THE HOUSING SOCIETY. IT WAS, THEREFORE, ARGUED THAT DEVELOPMENT AGREEMENT SHOWS THAT DOMINANT CONTROL OVER THE LAND WAS WITH ASSESSEE AND THE PROJECT WAS DEVELOPED AT THE COST AND RISK OF THE ASSESSEE. THE AO DENIED DEDUCTION U/S 80 IB (10) OF THE IT ACT ON THE GROUND THAT DATE OF COMPLETION OF THE HOUSING P ROJECT WAS 19 TH MARCH, 2009 THOUGH THE CERTIFICATE WHICH IS BUILDIN G USE CERTIFICATE SHOULD HAVE BEEN OBTAINED BY THE ASSESSEE BY 31-03- 2008. IT WAS EXPLAINED THAT THE ASSESSEE FIRM APPLIED FOR BU PER MISSION WITHIN TIME BUT DUE TO TECHNICAL INTERNAL PROBLEM THE LOCA L AUTHORITY FAILED TO ISSUE THE SAME BEFORE THAT DATE. THE ASSESSEE FIRM COMPLETED THE PROJECT IN JULY, 2006 AS IS PROVED BY THE APPLICATI ON DATED 15-02-2006 MOVED BEFORE THE AMC FOR OBTAINING BU PERMISSION WH ICH WAS REJECTED BY LETTER DATED 01-07-2006 BY AMC, COPY AT TACHED WITH THE ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 5 IMPUGNED ORDER AS ANNEXURE- 1 TO SHOW THAT WORK WA S COMPLETED AND USER WAS STARTED BEFORE 31-03-2008. ANNEXURE- 2 TO THE IMPUGNED ORDER IS LETTER DATED 16-03-2009 WHICH PRO VES THAT BUILDING WAS STARTED USING FROM 01-07-2006 WITHOUT PERMISSIO N FOR WHICH THE ASSESSEE PAID PENALTY. IT WAS, THEREFORE, SUBMITTED THAT BUILDING WAS IN USE PRIOR TO THE PRESCRIBED DATE AND SEVERAL TEN EMENTS HAVE BEEN SOLD FOR WHICH CLAIM WAS MADE U/S 80 IB (10) OF THE IT ACT. IT WAS FURTHER SUBMITTED THAT THE PROJECT WAS COMPLETED WI THIN 4 YEARS AND THE ASSESSEE MADE REQUEST FOR COMPLETION CERTIFICAT E WITHIN TIME. THE ISSUANCE OF COMPLETION CERTIFICATE IS A PROCEDURAL CONDITION AND SHOULD NOT BE TREATED AS MANDATORY CONDITION, OTHER WISE, IT WOULD CAUSE GRATE HARDSHIP AND INJUSTICE TO THE ASSESSEE. THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT V S GUJARAT OIL AND ALLIED INDIA 201 ITR 325 WAS RELIED UPON IN WHICH I T WAS HELD THAT FILING OF THE AUDIT REPORT FOR CLAIMING DEDUCTION U /S 80 J OF THE IT ACT IS NOT MANDATORY CONDITION AND IF IT IS FILED AT THE A SSESSMENT STAGE, IT WAS SUFFICIENT COMPLIANCE. IT WAS SUBMITTED THAT BU PERMISSION WAS PROCEDURAL AND CONSTRUCTION WAS COMPLETED BEFORE TH E SPECIFIED DATE AND ULTIMATELY BU PERMISSION WAS ALSO OBTAINED, THE REFORE, DELAY IN ISSUE OF BU PERMISSION IS NOT ATTRIBUTABLE TO THE A SSESSEE. IT WAS FURTHER SUBMITTED THAT DELAY IN ISSUE OF BU CERTIFI CATE WAS BECAUSE OF FINALIZATION OF DRAFT TOWN PLANNING SCHEME BUT COMP LETION OF THE CONSTRUCTION WAS PRIOR TO THE SPECIFIED DATE. THE B UILDING COMPLETION TOOK PLACED ON THE DATE WHEN IT WAS USED BY THE BUI LDERS FOR RESIDENTIAL PURPOSE OF THE MEMBERS. THE LEARNED CIT (A) ACCEPTED THE CLAIM OF THE ASSESSEE BECAUSE THE BUILDING WAS COMP LETED PRIOR TO THE SPECIFIED DATE WHICH IS ALSO EVIDENT FROM THE L ETTER OF THE AMC ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 6 DATED 01-07-2006. THEREFORE, THE LEARNED CIT(A) WAS OF THE VIEW THAT THE CONDITION THAT BU PERMISSION SHOULD BE OBTAINED BEFORE 31-03-2008 SHOULD BE INTERPRETED LIBERALLY AND SHOU LD NOT BE A BAR FOR GRANTING DEDUCTION U/S 80IB (10) OF THE IT ACT. THE LEARNED CIT(A) FOUND THAT THE CONTENTION OF THE ASSESSEE IS SUPPOR TED BY THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE C ASE OF GUJARAT OIL AND ALLIED INDIA (SUPRA) FOR TAKING LIBERAL INTERPR ETATION. 5. THE LEARNED CIT(A) FURTHER NOTED THAT ANOTHER CONDI TION IS THAT THE PROJECT IS ON THE SIZE OF PLOT OF LAND WHICH IS MINIMUM AREA OF 1 ACRE AND THIS CONDITION HAS NOT BEEN DISPUTED BY TH E AO. THE ASSESSEE ALSO INFORMED THAT THE TOTAL AREA WAS 1072 5 SQ. MTRS. OF THE LAND ON WHICH 101 RESIDENTIAL UNITS WERE CONSTRUCTE D. AGAIN, IN ORDER TO VERIFY THE AREAS, THE MATTER WAS REFERRED TO THE DVO WHO HAS GIVEN HIS REPORT DATED 22-01-2010 (ANNEXURE-3 OF THE IMPU GNED ORDER) IN WHICH IT WAS INFORMED THAT THE ASSESSEE ENTERED INT O AGREEMENTS WITH INDIVIDUAL PLOT OWNERS, THEREFORE, CONDITION IS VIO LATED. THE GOVERNMENT APPROVED VALUER FILED HIS COMMENTS IN WH ICH IT IS STATED THAT THE ASSESSEE ENTERED INTO DEVELOPMENT AGREEMEN T WITH THE SOCIETY AND THAT THE DEVELOPMENT PERMISSION IS GRAN TED BY AMC ON THE AREA OF THE LAND WHICH WAS MORE THAN 1 ACRE. TH E LEARNED CIT(A) CONSIDERING THE TOTAL AREA OF THE LAND, PERMISSION GRANTED BY AMC HELD THAT THE TOTAL LAND AREA IS 10725 SQ. MTRS. WH ICH IS MORE THAN 1 ACRE ON WHICH HOUSING PROJECT IS APPROVED BY THE LO CAL AUTHORITIES, THEREFORE, THE ASSESSEE SATISFIED THIS CONDITION AL SO FOR DEDUCTION. ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 7 6. THE LEARNED CIT(A) ALSO CONSIDERED ANOTHER CONDI TION WHETHER RESIDENTIAL UNITS HAVE MAXIMUM AREA OF 1500 SQ. FT. IN ORDER TO CONFIRM THIS CONDITION, THE MATTER WAS REFERRED TO THE DVO WHO IN HIS REPORT (ANNEXUR-3 TO THE IMPUGNED ORDER) OFFERED HI S COMMENTS THAT FSI OF EACH FLAT CONSTRUCTED IS LESS THAN THE PERMI SSIBLE LIMIT BUT THE INDIVIDUAL BUYER OF THE FLATS CAN ADD TO THE BUILD UP AREA OR CAN USE CONSTRUCTION IN THE OPEN TERRACE OR LATER ON CONSTR UCTION CAN BE MADE. THE LEARNED CIT(A), THEREFORE, NOTED THAT THERE IS NO SERIOUS OBJECTION IN THIS REGARD BECAUSE THE DVO IN HIS INSPECTION AL SO NOTED THAT THERE IS NO VIOLATION OF 1500 SQ. FT. LIMIT AND THAT THE DVO MERELY PRESUMED THAT FURTHER CONSTRUCTION MAY BE RAISED. I T WAS, THEREFORE, FOUND THAT BUILT UP ARE HAS NOT EXCEEDED THE LIMIT OF 1500 SQ. FT. 7. THE LEARNED CIT(A) FURTHER NOTED THAT THERE IS N O DISPUTE BY THE AO AND THE DVO WITH REGARD TO OTHER COMMERCIAL EST ABLISHMENT INCLUDED IN THE HOUSING PROJECT WHICH DOES NOT EXCE ED 5% AS PROVIDED IN THE SECTION. 8. THE LEARNED CIT(A) CONSIDERING THE TOTALITY OF T HE FACTS AND CIRCUMSTANCES OF THE CASE FOUND THAT THE ASSESSEE I NCURRED EXPENSES TOWARDS COST OF THE LAND, ACQUIRED DOMINAN T CONTROL OVER THE LAND, DEVELOPED THE PROJECT AT ITS OWN RISK WHI CH IS SUPPORTED BY THE DEVELOPMENT AGREEMENT, THEREFORE, THE ASSESSEE SATISFIED THE CONDITIONS OF SECTION 80 IB (10) OF THE IT ACT AND ALSO SATISFIED THE TEST LAID DOWN BY ITAT AHMEDABAD BENCH IN THE CASE OF SHAKTI CORPORATION IN ITA NO.1503/AHD/2005 ORDER DATED 07- 11-2008 AND ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 8 THE APPEAL OF THE ASSESSEE WAS ACCORDINGLY ALLOWED BY DIRECTING THE AO TO ALLOW DEDUCTION U/S 80 IB (10) OF THE IT ACT. 9. THE LEARNED DR RELIED UPON THE ORDER OF THE AO A ND REITERATED THE OBJECTION RAISED BY THE AO FOR DENYING THE DEDU CTION IN FAVOUR OF THE ASSESSEE. 10. ON CONSIDERATION OF THE FACTS NOTED IN THE IMPU GNED ORDER AND THE ANNEXURES ATTACHED WITH THE IMPUGNED ORDER, WE DO NOT FIND ANY MERIT IN THE DEPARTMENTAL APPEAL. EARLIER ITAT BENC HES HAVE DECIDED SIMILAR ISSUE IN THE CASE OF M/S. RADHE DEVELOPERS & OTHERS IN ITA NO.2482/AHD/2006 ORDER DATED 29-07-2007 AND SHAKTI CORPORATION (SUPRA) HAVE LAID DOWN SEVERAL TESTS FOR SATISFYING THE REQUIREMENTS OF SECTION 80IB (10) OF THE IT ACT. FURTHER, ITAT AH MEDABAD BENCH IN THE CASE OF M/S. AMALTAS ASSOCIATES VS ITO IN ITA NO.2401/AHD/2010 FOR ASSESSMENT YEAR 2004-05 VIDE O RDER DATED 21-01-2011 CONSIDERING ITS EARLIER DECISION IN THE CASES OF M/S. RADHE DEVELOPERS & OTHERS AND SHAKTI CORPORATION (S UPRA) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE FINDINGS O F THE TRIBUNAL IN THIS CASE FROM PARA 6 TO PARA 12 ARE REPRODUCED AS UNDER: 6. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND MATERIA L AVAILABLE ON RECORD. SECTION 80IB (10) READS AS UN DER: 80-IB. DEDUCTION IN RESPECT OF PROFITS AND GAINS FROM CERTAIN INDUSTRIAL UNDERTAKINGS OTHER THAN INFRASTRUCTURE DEVELOPMENT UNDERTAKINGS.--(1) WHERE THE GROSS TOTAL INCOME OF AN ASSESSEE INCLUDES ANY PROFITS AND GAINS DERIVED FROM ANY BUSINESS REFERRED TO IN SUB-SECTIONS 3(3) TO (11), (11A) AND (11B) (SUCH BUSINESS BEING HEREINAFTER ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 9 REFERRED TO AS THE ELIGIBLE BUSINESS), THERE SHALL, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF TH IS SECTION, BE ALLOWED, IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE, A DEDUCTION FROM SUCH PROFITS AND GAINS OF AN AMOUNT EQUAL TO SUCH PERCENTAGE AND FOR SUCH NUMBER OF ASSESSMENT YEARS AS SPECIFIED IN THIS SECTION. XXXX XXXX XXXX XXXX (10) THE AMOUNT OF DEDUCTION IN THE CASE OF AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEFORE THE 31ST DAY OF MARCH, 2008 BY A LOCAL AUTHORITY SHALL BE HUNDRED PER CENT . OF THE PROFITS DERIVED IN THE PREVIOUS YEAR RELEVAN T TO ANY ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF, (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER, 1998 AND COMPLETES SUCH CONSTRUCTION, (I) IN A CASE WHERE A HOUSING PROJECT HAS BEEN APPROVED BY THE LOCAL AUTHORITY BEFORE THE 1ST DAY OF APRIL, 2004, ON OR BEFORE THE 31ST DAY OF MARCH, 2008 ; (II) IN A CASE WHERE A HOUSING PROJECT HAS BEEN, OR , IS APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1ST DAY OF APRIL, 2004, WITHIN FOUR YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITY. EXPLANATION.FOR THE PURPOSES OF THIS CLAUSE, (I) IN A CASE WHERE THE APPROVAL IN RESPECT OF THE HOUSING PROJECT IS OBTAINED MORE THAN ONCE, SUCH ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 10 HOUSING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH THE BUILDING PLAN OF SUCH HOUSING PROJECT IS FIRST APPROVED BY THE LOCAL AUTHORITY ; (II) THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY ; (B) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WH ICH HAS A MINIMUM AREA OF ONE ACRE : PROVIDED THAT NOTHING CONTAINED IN CLAUSE (A) OR CLAUSE (B) SHALL APPLY TO A HOUSING PROJECT CARRIED OUT IN ACCORDANCE WITH A SCHEME FRAMED BY THE CENTRAL GOVERNMENT OR A STATE GOVERNMENT FOR RECONSTRUCTION OR REDEVELOPMENT OF EXISTING BUILDINGS IN AREAS DECLARED TO BE SLUM AREAS UNDER ANY LAW FOR THE TIME BEING IN FORCE AND SUCH SCHEME IS NOTIFIED BY THE BOARD IN THIS BEHALF; (C) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT-UP ARE A OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITIES OF DELHI OR MUMB AI OR WITHIN TWENTY-FIVE KILOMETERS FROM THE MUNICIPAL LIMITS OF THESE CITIES AND ONE THOUSAND AND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE ; AND (D) THE BUILT-UP AREA OF THE SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS INCLUDED IN THE HOUSING PROJECT DOES NOT EXCEED FIVE PER CENT. OF THE AGGREGATE BUILT-UP AREA OF THE HOUSING PROJECT OR TWO THOUSAND SQUARE FEET, WHICHEVER IS LESS. XXXXXX EXPLANATION. FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT NOTHING CONTAINED IN THIS SUB- SECTION SHALL APPLY TO ANY UNDERTAKING WHICH ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 11 EXECUTES THE HOUSING PROJECT AS A WORKS CONTRACT AWARDED BY ANY PERSON (INCLUDING THE CENTRAL OR STATE GOVERNMENT). 7. THE DEFINITION OF BUILT-UP AREA IS PROVIDED IN SECTION 80IB(14) (A) OF THE ACT, WHICH MEANS THE I NNER MEASUREMENTS OF THE RESIDENTIAL UNIT AT THE FLOOR L EVEL, INCLUDING THE PROJECTIONS AND BALCONIES, AS INCREAS ED BY THE THICKNESS OF THE WALLS BUT DOES NOT INCLUDE THE COMMON AREAS SHARED WITH OTHER RESIDENTIAL UNITS. BEFORE PROCEEDING FURTHER, IT WOULD BE RELEVANT TO MENTION THE FACTS CONSIDERED IN THE CASE OF RADHE DEVELOPER S AND SHAKTI CORPORATION (SUPRA) DECIDED BY THE ITAT, AHMEDABAD BENCHES. IN THE CASE OF RADHE DEVELOPERS (SUPRA), THE ASSESSEE CLAIMED DEDUCTION UNDER SECTI ON 80IB(10). HOWEVER, THE AO DISALLOWED THE CLAIM ON THE GROUND THAT (I) THE ASSESSEE WAS NOT THE OWNER OF T HE LAND, AND (II) EACH APPROVAL WAS ALSO NOT IN THE NA ME OF THE ASSESSEE AND IT HAD ACTED MERELY AS AN AGENT/CONTRACTOR FOR CONSTRUCTION OF RESIDENTIAL HO USE. THE CLAIM WAS DENIED TO THE ASSESSEE. THE TRIBUNA L CONSIDERED THE AVERMENTS AND MATERIAL ON RECORD AND HELD AS UNDER: 27. A BARE READING OF THESE PROVISIONS OF S. 80- IB(10), AS THEY STOOD IN THE YEARS UNDER CONSIDERATION, THE REQUIREMENTS FOR CLAIMING DEDUCTION FOR HOUSING PROJECTS ARE THAT (I) THERE MUST BE AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECT; (II) SUCH HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITY; (III) THE DEVELOPMENT AND CONSTRUCTION OF HOUSING PROJECT HAS COMMENCED ON OR AFTER 1ST OCT., 1998; (IV) THE HOUSING PROJECT IS ON A SIZE OF A PLOT OF LAND WHIC H HAS MINIMUM AREA OF ONE ACRE; AND (V) THE RESIDENTIAL UNIT DEVELOPED AND BUILT HAS A BUILT UP AREA OF 1,000 SQ. FT. IF IT IS SITUATED IN DELHI AN D MUMBAI OR WITHIN 25 KMS OF MUNICIPAL LIMIT OF THESE CITIES AND 1,500 SQ. FT. AT ANY OTHER PLACE. THERE IS NO OTHER CONDITION, WHICH IS TO BE COMPLIED BY AN ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 12 ASSESSEE FOR CLAIMING THE DEDUCTION ON PROFITS OF T HE HOUSING PROJECT. 28. THE CONTENTION OF THE REVENUE AUTHORITIES THAT TO CLAIM DEDUCTION UNDER S. 80-IB(L0), THERE IS A CONDITION PRECEDENT THAT THE ASSESSEE MUST BE OWNER OF THE LAND ON WHICH HOUSING PROJECT IS CONSTRUCTED HAS NO FORCE. WE DO NOT FIND ANY SUCH CONDITION AS APPEARING IN THE PROVISIONS OF THE SECTION EXTRACTED ABOVE. A PLAIN READING OF SUB-S. (10) OF S. 80-IB REVEALS AND MAKES IT EVIDENT THAT THERE MUST BE AN UNDERTAKING DEVELOPING AND BUILDING A HOUSING PROJECT AS APPROVED BY A LOCAL AUTHORITY. IT DOES NOT HAVE ANY FURTHER CONDITION T HAT SUCH DEVELOPMENT AND BUILDING OF THE HOUSING PROJECT SHOULD ALSO BE ON A LAND OWNED BY AN ASSESSEE UNDERTAKING. IT MIGHT BE TRUE THAT THE LAN D BELONGS TO THE PERSON WHO HAS ENTERED INTO AN AGREEMENT WITH THE ASSESSEE TO DEVELOP AND BUILD HOUSING PROJECT BUT ON A PERUSAL OF THE AGREEMENT AS NARRATED ABOVE, IT IS EVIDENT THAT THE DEVELOPMENT AND BUILDING WORK HAS BEEN CARRIED OUT BY THE ASSESSEE IN PURSUANCE OF A TRIPARTITE AGREEMENT AND IT IS NOT BY THE LAND-OWNERS. THEREFORE, THE MERE FACT THAT THE LANDOWNER AND THE UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECT, ARE TWO DIFFERENT ENTITIES WOULD NOT MAKE ANY DIFFERENCE. THE DEDUCTION WOULD BE ELIGIBLE TO THE PERSON WHO IS DEVELOPING AND BUILDING HOUSING PROJECT AND NOT TO THE MERE OWNER THEREOF. A PERSON WHO ENTERS INTO A CONTRACT WITH ANOTHER PERSON IS NO DOUBT A CONTRACTOR. HAVING ENTERED INT O AGREEMENTS WITH LANDOWNERS FOR DEVELOPMENT AND BUILDING THE HOUSING PROJECT, ASSESSEE WAS OBVIOUSLY A CONTRACTOR BUT IT DOES NOT DEROGATE THE ASSESSEE FOR BEING A DEVELOPER, AS WELL. THE TERM CONTRACTOR IS NOT ESSENTIALLY CONTRADICTORY TO THE TERM DEVELOPER. AS STATED ABOVE, IT IS THE UNDERTAKING THAT DEVELOPS OR BUILDS THE HOUSING PROJECT THAT IS ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 13 ENTITLED TO DEDUCTION IRRESPECTIVE OF THE FACT WHET HER THAT IT IS THE OWNER OR NOT OR WHETHER IT IS THE CONTRACTOR THEREOF. THE REQUIREMENT FOR CLAIMING DEDUCTION IS THAT SUCH AN UNDERTAKING MUST DEVELOP AND BUILD HOUSING PROJECT, BE IT ON THEIR OWN LAND OR ON THE LAND OF OTHERS AND FOR WHICH A TRIPARTITE AGREEMENT HAS BEEN ENTERED INTO FOR DEVELOPMENT AND BUILDING HOUSING PROJECT; OR BE THE ASSESSEE A CONTRACTOR FOR DEVELOPING AND BUILDING HOUSING PROJECT OR AN OWNER OF THE LAND. THE WORD DEVELOPMENT MEANS THE REALIZATION OF POTENTIALITIES OF LAND OR TERRITORY BY BUILDING OR MINING. ACCORDINGLY, IT CAN BE SAFELY SAID THAT A PERSON WHO UNDERTAKES TO DEVELOP REAL ESTATE BY DEVELOPING AND CONSTRUCTING A HOUSING PROJECT IS AN ELIGIBLE UNDERTAKING; DEVELOPING AND BUILDING OF HOUSING PROJECTS WITHIN THE MEANING OF S. 80-IB(10) OF THE ACT. IN THE PRESENT CASE IN HAND, THE LANDOWNER HAS NOT MADE ANY CONSCIOUS ATTEMPT TO DEVELOP THE PROPERTY EXCEPT ENSURING THEIR RIGHTS A S LANDOWNER SO THAT THE SALE VALUE OF THE LAND COULD BE REALIZED TO THEM AS PER THE TERMS OF AGREEMENT TO SALE AND THE DEVELOPMENT AGREEMENT . THE LANDOWNERS, NO DOUBT, HAVE NOT THROWN THEMSELVES INTO DEVELOPMENT OF PROPERTY. IT IS ONLY THE ASSESS EE WHO IS DEVELOPING THE PROPERTY. THROWING ITSELF INT O THE BUSINESS OF DEVELOPMENT AND BUILDING OF HOUSING PROJECTS BY TAKING ALL RISKS ASSOCIATED WIT H THE BUSINESS BY ENGAGING ARCHITECTS, STRUCTURAL CONSULTANTS, DESIGNING AND PLANNING OF THE HOUSING SCHEMES, PAYMENT OF DEVELOPMENT CHARGES, OBTAINING NECESSARY PERMISSIONS, APPROVING PLANS, HIRING MACHINERY AND EQUIPMENTS, HIRING ENGINEERS, APPOINTING CONTRACTORS, ETC. NO DOUBT, THE PERMISSION HAS BEEN OBTAINED IN THE NAME OF THE REGISTERED LANDOWNERS, BUT THE SAME HAVE BEEN OBTAINED BY THE ASSESSEE FIRM THROUGH ITS PARTNERS WHO ARE HOLDING POWER OF ATTORNEY OF THE RESPECTIVE LANDOWNERS. IT IS A FACT THAT THE ASSESSEE IS A ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 14 DEVELOPER AND NOT A CONTRACTOR AS HELD BY THE LOWER AUTHORITIES. THE DEVELOPER IS NOT WORKING ON REMUNERATION FOR THE LANDOWNERS, BUT DEVELOPER IS WORKING FOR HIMSELF IN ORDER TO EXPLOIT THE POTENTI AL OF ITS BUSINESS IN HIS OWN INTEREST AND, THEREFORE, OP TED FOR ALL BUSINESS RISKS ASSOCIATED WITH THE BUSINESS OF DEVELOPMENT OF REAL ESTATE INCLUDING DEVELOPING AND BUILDING OF HOUSING PROJECTS. AS PER THE PROVISIONS OF S. 2(1)(G) OF REGULATION OF EMPLOYMENT AND CONDITIONS OF SERVICE ACT (27 OF 1996), THE TERM CONTRACTOR MEANS A PERSON WHO UNDERTAKES TO PRODUCE A GIVEN RESULT FOR ANY ESTABLISHMENT, OTHER THAN A MERE SUPPLY OF GOODS OR ARTICLES OF MANUFACTURE, BY THE EMPLOYMENT OF BUILDING WORKERS OR WHO SUPPLIES BUILDING WORKERS FOR ANY WORK OF THE ESTABLISHMENT; AND INCLUDES A SUB- CONTRACTOR. IN THOSE CIRCUMSTANCES, THE ASSESSEE IS ENTITLED TO DEDUCTION UNDER S. 80-IB(10) AS IT HAD DEVELOPED AND BUILT THE HOUSING PROJECT; IT HAD STARTED CONSTRUCTION AFTER 1 DAY OF APRIL 1998; THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WHICH HAS A MINIMUM AREA OF ONE ACRE AND THE MAXIMUM BUILT-UP AREA OF THE RESIDENTIAL UNITS IS NOT MORE THAN 1,500 SQ. FT . IT MAY ALSO BE BORN IN MIND THAT DEDUCTION IS NOT EXCLUSIVELY TO AN ASSESSEE BUT TO AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECT, BE IT DEVELOPED BY A CONTRACTOR OR BY AN OWNER. THE ASSESSEE, IN THE INSTANT CASE, CAN ALSO BE SAID TO BE THE OWNER OF THE LAND AS IT HAD MADE PART PAYMENT TO THE LANDOWNERS DURING THE FINANCIAL YEARS 2000-01 AND 2001-02 FOR AN AMOUNT OF RS. 56 LACS, AND TAKEN THE POSSESSION OF THE LAND FOR DEVELOPMENT AND BUILDING THE HOUSING PROJECT AND SATISFY THAT CONDITION AS WELL OF BEING THE OWNER O F THE LAND IN VIEW OF PROVISIONS OF S. 2(47)(V). WHEN THE ASSESSEE HAS TAKEN ON THE POSSESSION OF ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 15 IMMOVABLE PROPERTY OR RETAINED IT IN PART PERFORMANCE OF A CONTRACT OF A NATURE REFERRED TO I N S. 53A OF THE TRANSFER OF PROPERTY ACT, 1882 IT AMOUNTS TO TRANSFER UNDER S. 2(47)(V). IN THE INSTANT CASE THERE WAS, DEFINITELY, A DOMINI ON OF THE DEVELOPER OVER THE LAND TO THE EXCLUSION OF OTHERS INASMUCH AS POSSESSION OF THE LAND IS GIVEN TO THE DEVELOPER BY THE LAND OWNERS TO CARRY OUT TH E CONSTRUCTION ACTIVITY OF THE HOUSING PROJECT. THE ASSESSEE DEVELOPER HAS COMPLIED WITH ALL THE CONDITIONS AS PROVIDED UNDER S. 80-IB(10) OF THE AC T, SO AS TO CLAIM DEDUCTION. THE ASSESSEE HAS ALSO PASSED ON THE PART CONSIDERATION FOR ACQUIRING THE LAND THROUGH AN AGREEMENT TO SALE AND IN VIEW OF THE PROVISIONS OF S. 2(47) R/W S. 53A OF THE TRANSF ER OF PROPERTY ACT, 1882, THE ASSESSEE HAS COMPLETELY PERFORMED HIS PART OF THE CONTRACT AND DEVELOPED THE HOUSING PROJECT AND TRANSFERRED THE FLATS/TENEMENTS TO THE BUYERS IN VIEW OF AGREEMENT TO SALE AS WELL AS DEVELOPMENT AGREEMENT. IT SHOWS THAT THE ASSESSEE WAS IN FULL POSSESSION OF THE LAND FOR THE DEVELOPMENT OF HOUSING PROJECT AND HAS CARRIED OUT ALL THE ACTIVITIES OF A COMPLETE HOUSING PROJECT BY TAKING ALL RISKS ASSOCIATED WITH THIS BUSINESS. THE ASSESSEE IS ENGAGED IN COMPLETE INFRASTRUCTURE INCLUDING ENGAGING ARCHITECTS, STRUCTURAL CONSULTANTS, DESIGNING AND PLANNING OF T HE HOUSING SCHEMES, PAYMENT OF DEVELOPMENT CHARGES, OBTAINING NECESSARY PERMISSIONS, ON BEHALF OF THE LANDOWNERS, GOT THE PLANS APPROVED, HIRING OF MACHINERY AND EQUIPMENTS, HIRING ENGINEERS, APPOINTING CONTRACTORS, ETC. AS DISCUSSED ABOVE AND IN VIEW OF THE CASE LAW OF THE SUPREME COURT IN THE CASE OF MYSORE MINERALS LTD. (SUPRA), WHEREIN IT HAS BEEN CATEGORICALLY OBSERVED AS REGARDS TO OWNERSHIP THAT ANYONE IN POSSESSION OF PROPERTY IN HIS OWN TITLE EXERCISING SUCH DOMINION OVER THE PROPERTY AS WOULD ENABLE ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 16 OTHERS BEING EXCLUDED THEREFROM AND HAVING THE RIGHT TO USE AND OCCUPY THE PROPERTY AND/OR TO ENJO Y ITS USUFRUCT IN HIS OWN RIGHT WOULD BE THE OWNER OF THE BUILDINGS THOUGH A FORMAL DEED OF TITLE MIGHT N OT HAVE BEEN SALE AND DEVELOPMENT AGREEMENT , THE ASSESSEE HAS ACQUIRED DOMINION OVER THE LAND TO THE EXCLUSION OF OTHERS AND HE HAS COMPLETED THE PROJECT ON TERMS AND CONDITIONS LAID DOWN UNDER S. 80-IB(10) OF THE ACT, TO CLAIM DEDUCTION ON THE PRO FIT DERIVED FROM CONSTRUCTION AND DEVELOPMENT OF RESIDENTIAL HOUSING PROJECT. THERE IS NO EXPLICIT CONDITION ENUMERATED IN S. 80-IB(10) OF THE ACT AS REGARDS TO REQUIREMENT OF OWNERSHIP FOR THE CLAIM O F DEDUCTION. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LEGAL PROPOSITION LAID DOWN BY THE SUPREME COURT IN THE CASE OF MYSORE MINERALS LTD. (SUPRA), WE HOLD THAT THE ASSESSEE IS ENTITLED FOR CLAIM OF DEDUCTION ON THE PROFITS DERIVED FROM CONSTRUCTION AND DEVELOPMENT OF RESIDENTIAL HOUSING PROJECT. 8. IN THE CASE OF SHAKTI CORPORATION (SUPRA), THE ASSESSEE CLAIMED THE DEDUCTION UNDER SECTION 80IB(1 0). THE AO DISALLOWED THE ASSESSEES CLAIM ON THE GROUN D THAT IT WAS NOT THE OWNER OF THE PROPERTY; THAT THE PERMISSION WAS NOT GRANTED IN THE ASSESSEES NAME A ND THE APPROVAL FROM THE MUNICIPAL CORPORATION WAS IN THE NAME OF THE ORIGINAL LAND OWNER AND NOT IN THE NAME OF THE ASSESSEE. THE TRIBUNAL CONSIDERED THE AVERMENT AND THE MATERIAL ON RECORD AND ALLOWED THE CLAIM OF THE ASSESSEE AND IT WAS HELD AS UNDER: IN THE INSTANT CASE, THERE WAS NO AGREEMENT TO SHARE THE CONSTRUCTED AREA. THIS AGREEMENT RELATES ONLY TO PURCHASE PART OF THE LAND FROM THE LANDOWNE R BY THE ASSESSEE FOR A PREDETERMINED CONSIDERATION. ALL THE RESPONSIBILITIES FOR CARRYING OUT THE CONSTRUCTION, PERMISSION, NA, NOC, LEGAL PROCEEDINGS AND THE RESULTS OF THE DEVELOPMENT LIES WITH THE ASSESSEE. THE FIRST PARTY IS ONLY TO CO- ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 17 OPERATE THE ASSESSEE IN CARRYING OUT THE DEVELOPMENT AND ALSO TO EXECUTE THE DOCUMENTS WHENEVER IT IS REQUIRED BY THE DEVELOPER. THE ASSESSEE HAS ALSO HANDED OVER THE PHYSICAL POSSESSION TO THE BUILDER FOR CARRYING OUT THE DEVELOPMENT OF THE PROJECT. THE LANDOWNER DOES NOT HAVE ANY RIGHT, INTEREST, TITLE IN THE DEVELOPMENT SO CARRIED OUT EXCEPT TO THE EXTENT HE HAS TO RECEIVE THE CONSIDERATION FROM THE ASSESSEE. THE ASSESSEE IS ENTITLED TO PUBLICIZE THE PROJECT, PRINT BROCHUR ES, ETC., AND CAN SELL THE PROJECT AT ITS OWN RIGHT. AL L THE EXPENSES HAVE TO BE INCURRED BY THE ASSESSEE FOR CARRYING OUT THE CONSTRUCTION, ETC. THE LANDOWNER HAS TO DO NOTHING EXCEPT TO THE EXTENT HE HAS TO RECEIVE CONSIDERATION FROM THE ASSESSEE. HIS MOTIVE IS NOT TO DEVELOP, CONSTRUCT OR CARRY ON THE BUSINE SS AS A BUILDER OR DEVELOPER. PRACTICALLY NO RIGHT IN THE LAND REMAINS WITH THE OWNER. FOR WHOLE PRACTICAL PURPOSE THE ASSESSEE ACQUIRED DOMINANT RIGHT OVER THE LAND AND HE CAN DEAL WITH THE LAND IN THE MANNER IN WHICH HE MAY LIKE. THUS, THE TERMS AND CONDITIONS ENTERED INTO, IN OUR OPINION, GIVE ALL DOMINANT CONTROL AND RIGHTS OVER THE LAND TO THE ASSESSEE. THE ASSESSEE, IN OUR OPINION, WILL BE CONSTRUCTING THE BUILDING AT ITS OWN COST AND WILL REMAIN THE OWNER OF THE BUILDING AT ITS OWN WITHOUT ANY INTERFERENCE FROM THE LANDOWNER. THE LANDOWNER DOES NOT HAVE ANY RIGHT TO SHARE THE BUILDINGS. THE AGREEMENT DOES NOT ENVISAGE THAT THE ASSESSEE WILL BE WORKING AS A CONTRACTOR OR AGENT ON BEHALF OF THE LANDOWNER. THE AGREEMENT CANNOT BE REGARDED TO BE THE JOINT VENTURE OR COLLABORATION AGREEMENT. IT IS, IN OUR OPINION, THE AGREEMENT FOR THE SALE OF THE LAND FOR A DETERMINED CONSIDERATION UNDER WHICH THE ASSESSEE IS ENTITLED TO DEVELOP THE PROJECT ON THE SAID LAND AT ITS OWN COST IN THE MANNER IN WHICH HE MAY DECIDE. THE FACTS INVOLVED IN THE CASE OF THE ASSESSEE ARE SIMILAR TO THE FACTS IN THE CASE OF RADHE DEVELOPER S ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 18 & ORS. (SUPRA) AND, ACCORDINGLY, WE ARE OF THE VIEW THAT THE ASSESSEE HAS ACQUIRED THE DOMINANT OVER THE LAND AND HAS DEVELOPED THE HOUSING PROJECT BY INCURRING ALL THE EXPENSES AND TAKING ALL THE RISKS INVOLVED THEREIN. WE MAY MENTION HERE THAT, IN OUR OPINION, THE DECISION IN THE CASE OF RADHE DEVELOPERS & ORS. (SUPRA) WILL NOT APPLY IN A CASE WHERE THE ASSESSEE HAS ENTERED INTO THE AGREEMENT FOR A FIXED REMUNERATION MERELY AS A CONTRACTOR TO CONSTRUCT OR DEVELOP THE HOUSING PROJECT ON BEHALF OF THE LANDOWNER. THE AGREEMENT ENTERED INTO IN THAT CASE WILL NOT ENTITLE THE DEVELOPER TO HAVE TH E DOMINANT CONTROL OVER THE PROJECT AND ALL THE RISKS INVOLVED THEREIN WILL VEST WITH THE LANDOWNER ONLY. THE INTEREST OF THE DEVELOPER WILL BE RESTRICTED ON LY FOR THE FIXED REMUNERATION FOR WHICH HE WOULD BE RENDERING THE SERVICES. THE DECISION IN THE CASE OF RADHE DEVELOPERS & ORS. (SUPRA) HAS NOT DEALT WITH SUCH SITUATION. THE PROPOSITION OF LAW LAID DOWN IN THE CASE OF RADHE DEVELOPERS & ORS. (SUPRA) CANNOT BE APPLIED UNIVERSALLY WITHOUT LOOKING INTO THE DEVELOPMENT AGREEMENT ENTERED INTO BY THE DEVELOPER ALONG WITH THE LANDOWNER. IN THE CASE OF THE ASSESSEE, SINCE IT HAD FILED COPY OF THE DEVELOPMENT AGREEMENT AND CRUX OF THE AGREEMENT WAS THAT THE ASSESSEE HAD PURCHASED THE LAND AND HAD DEVELOPED THE HOUSING PROJECT AT ITS OWN, THE ASSESSEE WOULD BE ENTITLED TO THE DEDUCTION UNDER SECTION 80IB(10). 9. THE LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO THE TERMS OF THE AGREEMENT FOR HOUSING PROJECT (PB 62). ACCORDING TO WHICH, THE RESPONSIBILITY OF THE ASSES SEE HAVE BEEN ANALYZED IN SUCH MANNER THAT THE PLANNING , SANCTION OF PLAN, WORK OF CONSTRUCTION, DEVELOPMENT OF THE PROPERTY, LABOUR ENGAGEMENT SHALL HAVE TO BE DONE B Y THE ASSESSEE IN RESPECT OF THE DEVELOPMENT OF THE PROPE RTY IN QUESTION. IT IS FURTHER PROVIDED THAT THE ASSESSEE SHALL PROVIDE PARTIES/MEMBERS TO WHOM SALE IS TO BE MADE BY ENROLLING THE MEMBERS. THE ASSESSEE SHALL ACCEPT A LL THE ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 19 PAYMENTS FROM THE MEMBERS/BUYERS. THE LEARNED COUNSEL FOR THE ASSESSEE FILED DETAILS OF THE SALE PROCEEDS RECEIVED FROM THE PARTIES OF 110 UNITS IN THE ASSES SMENT YEAR 2005-2006 AND 2006-2007. IT WOULD SUPPORT THE CASE OF THE ASSESSEE THAT THE ASSESSEE RECEIVED ENT IRE SALE CONSIDERATION FROM THE MEMBERS/BUYERS AFTER COMPLETION OF THE DEVELOPMENT AND BUILDING HOUSING PROJECT. AGREEMENT FURTHER PROVIDES THAT THE ASSES SEE SHALL PROVIDE PAYMENT FOR CONSTRUCTION, ENGAGE ARCH ITECT, ENGINEERS/SITE SUPERVISORS AND SHALL ALSO OBTAIN AL L PERMISSION FROM THE AUDA. THE ASSESSEE SHALL MAKE ALL FINANCIAL ARRANGEMENTS FOR THE PURPOSE OF IMPLEMENT ING HOUSING PROJECT AND SHALL EXECUTE ALL DEEDS IN THIS BEHALF. THE AGREEMENT FURTHER PROVIDES THAT THE ASSESSEE SH ALL RECOMMEND THE NAMES OF THE MEMBERS FOR ALLOTMENT AN D LAND SHALL REMAIN OPEN FOR CONSTRUCTION FOR THE ASS ESSEE AND THE ASSESSEE SHALL HAVE ALL RIGHTS FOR USING OF ALL THE TERRACE AND OPEN SPACE IN ANY MANNER. THE AGREEMEN T FURTHER PROVIDES THAT AFTER IMPLEMENTATION AND COMP LETION OF THE PROJECT, WHATEVER PROFIT/SURPLUS OR LOSS/DEF ICIT TO THE ASSESSEE OUT OF THE PROJECT WILL REST WITH THE ASSE SSEE AND THE ASSESSEE SHALL BE RESPONSIBLE AND LIABLE FO R ALL THE LOSSES SUFFERED FOR THE COMPLETION OF THE PROJE CT AND THE ASSESSEE SHALL COMPENSATE IN THIS BEHALF. THE AGREEMENT FURTHER PROVIDES THAT THE ASSESSEE SHALL INCUR ALL EXPENSES FOR COMMON FACILITY LIKE, LIGHTS, WATE R, SEWERAGE, LIFT, BORE-WELL ETC. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO FILED COPY OF THE AGREEMENT TO SELL D ATED 12-8-2003 THROUGH WHICH THE ASSESSEE PURCHASED THE PROPERTY IN QUESTION THROUGH AGREEMENT TO SELL FOR CONSIDERATION OF RS.3 LAKHS AND ALSO FILED COPY OF THE LEDGER ACCOUNT AND BANKING STATEMENT OF THE ASSESSE E AS WELL AS OF THE SOCIETY TO SHOW THAT THE AMOUNT OF S ALE CONSIDERATION OF RS.3 LAKHS IS TRANSFERRED IN A SUM OF RS.2.50 LAKHS AND RS.50,000/- FROM THE ASSESSEE AND WAS RECEIVED BY THE SOCIETY IN THEIR ACCOUNT. IT W OULD THEREFORE PROVE THAT THE ASSESSEE MADE THE PAYMENT OF SALE CONSIDERATION OF THE PROPERTY IN QUESTION THRO UGH BANKING CHANNEL. THE DETAILS OF THE AMOUNT RECEIVE D AS A SALE PROCEEDS FROM THE MEMBERS/PROPOSED BUYER IS AL SO ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 20 FILED TO SUPPORT THE CONTENTION OF THE ASSESSEE THA T THE ASSESSEE RECEIVED ENTIRE SALE PROCEEDS IN ITS BOOKS OF ACCOUNTS WITH ALL RIGHTS TO USE PROFIT AND LOSS. P B-130 IS THE REPLY FILED BEFORE THE LEARNED CIT(A) TO EXPLAI N THE ABOVE POSITION THAT THE ASSESSEE PAID SALE CONSIDER ATION TO THE SOCIETY. THE LEARNED COUNSEL FOR THE ASSESS EE ALSO REFERRED TO THE QUERIES RAISED BY THE CIT(A) IN THI S REGARD WHICH IS PROPERLY EXPLAINED BY THE ASSESSEE. THE A BOVE FACTS WOULD PROVE THAT THE ASSESSEE ENTERED INTO AN AGREEMENT TO SELL WITH THE SOCIETY FOR CONSIDERATIO N. ALL THE RESPONSIBILITIES FOR CARRYING OUT THE CONSTRUCT ION, PERMISSION AND DEVELOPMENT OF THE PROJECT LIE WITH THE ASSESSEE. THE REAL OWNER OF THE LAND WAS ONLY TO C O- OPERATE WITH THE ASSESSEE IN CARRYING OUT THE DEVELOPMENT AND ALSO TO EXECUTE NECESSARY DOCUMENTS WHENEVER REQUIRED BY THE ASSESSEE AS A DEVELOPER. THE REAL OWNER HAS ALSO HANDED OVER THE PHYSICAL POSSES SION TO THE SOCIETY AS A BUILDER FOR CARRYING OUT THE DEVELOPMENT OF THE PROJECT. THE LAND OWNER DID NO T LEFT WITH ANY RIGHT, INTEREST OR TITLE IN DEVELOPMENT WH ICH WAS CARRIED OUT BY THE ASSESSEE. THE ASSESSEE WAS ENTI TLED TO ENROLL THE MEMBERS FOR SELLING THE UNITS WITHIN ITS OWN RIGHTS. ALL THE EXPENSES HAVE TO BE INCURRED BY TH E ASSESSEE FOR CARRYING OUT THE CONSTRUCTION ETC. T HE MOTIVE OF THE REAL OWNER WAS NOT TO DEVELOP, CONSTR UCT OR CARRYING OUT ANY BUSINESS AS A BUILDER OR DEVELOPER AND PRACTICALLY NO RIGHT IN THE HANDS OF THE REAL OWNER IN THIS BEHALF. WITH ALL INTENTS AND PURPOSES, THE ASSESSE E HAS ACQUIRED DOMINANT RIGHT OVER THE LAND AND THE ASSES SEE COULD DEAL WITH THE LAND IN THE MANNER IN WHICH THE ASSESSEE MIGHT HAVE LIKED. THE TERMS AND CONDITIONS ENTERED INTO BETWEEN THE ASSESSEE AND THE SOCIETY A S PER THE DEVELOPMENT AGREEMENT AND AGREEMENT TO SELL PROVIDED ALL DOMINANT CONTROL AND RIGHTS OVER THE L AND TO THE ASSESSEE AND THE ASSESSEE WOULD BE DEVELOPING A ND CONSTRUCTING THE HOUSING PROJECT AT ITS OWN COST AN D WOULD REMAIN OWNER OF THE BUILDING WITHOUT ANY INTERFEREN CE FROM THE LAND OWNER. THE AGREEMENT IN QUESTION DID NOT PROVIDE THAT THE ASSESSEE WOULD BE WORKING AS A CONTRACTOR OR AGENT ON BEHALF OF THE LAND OWNER. T HE ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 21 AGREEMENT IN QUESTION WOULD NOT BE REGARDED TO BE T HE JOINT-VENTURE OR COLLABORATION AGREEMENT. IT WAS T HE AGREEMENT FOR SALE OF THE LAND FOR DETERMINED CONSIDERATION UNDER WHICH THE ASSESSEE WAS ENTITLED TO DEVELOP THE HOUSING PROJECT ON THE SAID LAND IN ITS OWN COST AND IN THE MANNER IN WHICH THE ASSESSEE MIGHT HAVE DECIDED. THE AUTHORITIES BELOW REJECTED THE CLAIM OF THE ASSESSEE, BECAUSE, ORIGINALLY, THE ASSESSEE WAS AUTHORIZED TO CONSTRUCT 94 RESIDENTIAL UNITS, BUT A S AGAINST THE AGREEMENT, LATER ON, THE ASSESSEE CONSTRUCTED 1 10 UNITS. HOWEVER, WE FIND THAT THERE IS BAR TO CONST RUCT MORE FLATS OR UNITS BY THE ASSESSEE IN THE GIVEN FA CTS OF THE CASE. IT IS A MATTER BETWEEN THE LAND OWNER AN D THE ASSESSEE. ONCE SANCTION PLAN IS APPROVED BY THE MUNICIPAL AUTHORITIES ON THE PAPERS SUBMITTED BY TH E REAL OWNER, IT COULD BE DEEMED APPROVAL OF CONSTRUCTION OF HOUSING FLATS IN FAVOUR OF THE ASSESSEE, MORE SO, W HEN THE ASSESSEE ENTERED INTO AN AGREEMENT TO SELL WHOL E OF THE PROPERTY. SO THE OBJECTION OF THE AUTHORITIES BELOW THAT THE ASSESSEE CONSTRUCTED MORE FACTS IS NOT SUSTAINABLE IN LAW. THE ABOVE FACTS, IF CONSIDERED IN LIGHT OF DECISION OF THE ITAT, AHMEDABAD BENCHES, IN THE CASE OF RADHE DEVELOPERS AND THE SHAKTI CORPORATION, WE ARE OF THE VIEW THAT THE ISSUE IS NOW COVERED BY THE AB OVE DECISION OF THE TRIBUNAL IN FAVOUR OF THE ASSESSEE, BECAUSE, THE ASSESSEE HAS ACQUIRED DOMINION RIGHT O VER THE LAND AND HAS DEVELOPED THE HOUSING PROJECT BY INCURRING ALL THE EXPENSES AND TAKING ALL THE RISK INVOLVED THEREIN. THE CRUX OF THE MATTER WOULD BE THAT THE ASSESSEE HAS PURCHASED THE LAND AND HAS DEVELOPED T HE HOUSING PROJECT AT ITS OWN COST, THEREFORE, WE ARE OF THE VIEW THAT THE ASSESSEE WILL BE ENTITLED FOR DEDUCTI ON UNDER SECTION 80IB(10) OF THE ACT. 10. THE ASSESSEE FILED DETAILS OF BUILT UP AREA OF ALL 110 UNITS OF THE RESIDENTIAL FLATS AT PAGE NO.52 AND 53 OF THE PB TO SHOW THAT THE BUILT UP AREA WAS LESS THAN 150 0 SQ. FEET. HOWEVER, THE DVO REPORTED IN HIS REPORT (PB- 46) THAT CONSIDERING THE OPEN TERRACE IN FRONT OF PENT- HOUSE ROOM AT 6TH FLOOR WHICH IS ANALOGOUS TO BALCONY/VER ANDAH, ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 22 THEN BUILT-UP AREA IN THIS MANNER WILL MEASURE MORE THAN 2500 SQ. FEET TO 2600 SQ. FEET APPROXIMATELY. IT I S THEREFORE A CASE SET UP AGAINST THE ASSESSEE THAT T HE OPEN TERRACE IS ANALOGOUS TO BALCONY/VERANDAH AND I F IT IS INCLUDED IN THE DEFINITION OF BUILT-UP AREA, THEN I T WOULD EXCEED THE PRESCRIBED LIMIT. THE DEFINITION OF BUI LT-UP AREA MEANS INNER MEASUREMENT OF THE RESIDENTIAL UNIT AT THE FLOOR LEVEL INCLUDING THE PROJECTIONS AND BALCONIES AS INCREASED BY THE THICKNESS OF THE WALLS BUT DOES NO T INCLUDE THE COMMON AREAS SHARED WITH OTHER RESIDENT IAL UNITS. THE LEARNED COUNSEL FOR THE ASSESSEE PROVI DED FROM DIFFERENT DICTIONARIES THE DEFINITION OF BALC ONY WHICH READS AS UNDER: 1. (ARCH.) A PLATFORM PROJECTING FROM THE WALL OF A BUILDING, USUALLY RESTING ON BRACKETS OR CONSOLES, AND ENCLOSED BY A PARAPET; AS A BALCONY IN FRONT OF A WINDOW. ALSO, A PROJECTING GALLERY IN PLACES OF AMUSEMENTS; AS, THE BALCONY IN A THEATER. [1913 WEBESTER] 2. 1): AN UPPER FLOOR PROJECTING FROM THE REAR OVER THE MAIN FLOOR IN AN AUDITORIUM 2): A PLATFORM PROJECTING FROM THE WALL OF A BUILDI NG AND SURROUNDED BY A BALUSTRADE OR RAILING OR PARAPET. SOURCE : WORD NET (R) 2.0 3. 1(ARCH.) A PLATFORM PROJECTING FROM THE WALL OF A BUILDING, USUALLY RESTING ON BRACKETS OR CONSOLES , AND ENCLOSED BY A PARAPET; AS A BALCONY IN FRONT OF A WINDOW. ALSO, A PROJECTING GALLERY IN PLACES OF AMUSEMENTS; AS, THE BALCONY IN A THEATER. SOURCES: WEBSTERS REVISED UNABRIDGED DICTIONARY (1913). ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 23 11. WHEN THE ABOVE MEANING OF BALCONY IS TAKEN IN TO CONSIDERATION WITH THE DEFINITION OF BUILT-UP AREA AS PROVIDED IN THE ACT, IT IS CLEAR THAT FINDING OF TH E AUTHORITIES BELOW ARE NOT SUSTAINABLE IN LAW. IT IS AN ADMITTE D FACT THAT THE OPEN TERRACE IN FRONT OF PENT-HOUSE WAS CONSIDERED AS BALCONY/VERANDAH. THE OPEN TERRACE I S NOT COVERED AND IS OPEN TO SKY AND WOULD NOT BE PART OF THE INNER MEASUREMENT OF THE RESIDENTIAL FLOOR AT ANY F LOOR LEVEL. THE DEFINITION OF BUILT-UP AREA IS INCLUS IVE OF BALCONY WHICH IS NOT OPEN TERRACE. THE DVO HAS CONSIDERED THE OPEN TERRACE AS ANALOGOUS TO BALCONY/VERANDAH WITHOUT ANY BASIS. THEREFORE, THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN REJECTING T HE CLAIM OF THE ASSESSEE BY TAKING THE OPEN TERRACE AS BALCONY/VERANDAH. THEREFORE, THE ASSESSEE HAS COMP LIED WITH ALL THE REQUIREMENTS OF SECTION 80IB (10) OF T HE ACT IN THIS REGARD. MOREOVER, THE ITAT, NAGPUR BENCH IN T HE CASE OF AIR DEVELOPERS (SUPRA) HAS HELD AS UNDER: IN VIEW OF THE DECISION OF THE KOLKATA BENCH OF TH E TRIBUNAL IN THE CASE OF BENGAL AMBUJA HOUSING DEVELOPMENT LTD. V. DY. CIT (IT APPEAL NO. 1595 (KOL) OF 2005, DATED 24-3-2006], WHICH WAS SQUARELY APPLICABLE TO THE INSTANT CASE, IT WAS TO BE HELD THAT IF THE ASSESSEE HAD DEVELOPED A HOUSING PROJECT WHEREIN THE MAJORITY OF THE RESIDENTIAL UNI TS HAD A BUILT-UP AREA OF LESS THAN 1500 SQ. FT., I.E. , THE LIMIT PRESCRIBED BY SECTION 80-IB(10) AND ONLY A FE W RESIDENTIAL TRAITS WERE EXCEEDING THE BUILT-UP AREA OF 1500 SQ. FT., THERE WOULD BE NO JUSTIFICATION TO DISALLOW THE ENTIRE DEDUCTION UNDER SECTION 80- IB(10). IT WOULD BE /AIR AND REASONABLE TO ALLOW TH E DEDUCTION ON A PROPORTIONATE BASIS, I.E. ON THE PRO FIT DERIVED FROM THE CONSTRUCTION OF THE RESIDENTIAL UN IT WHICH HAD A BUILT-UP AREA OF LESS THAN 12500 SQ. FT ., I.E. THE LIMIT PRESCRIBED UNDER SECTION 80IB(10). IN VIEW OF THE ABOVE, THE AO WAS TO BE DIRECTED THAT I F IT WAS FOUND THAT THE BUILT-UP AREA OF SOME OF THE RESIDENTIAL UNITS WAS EXCEEDING 1500 SQ. FT., HE WOULD ALLOW THE PROPORTIONATE DEDUCTION UNDER ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 24 SECTION 80-IB(10). ACCORDINGLY, THE APPEAL OF THE REVENUE WAS TO BE DISMISSED AND CROSS-OBJECTION OF THE ASSESSEE WAS DEEMED TO BE PARTLY ALLOWED. THEREFORE, IN THE LIGHT OF THE DECISION OF THE ITAT , NAGPUR BENCH, THE AUTHORITIES BELOW SHOULD NOT HAVE REJECT ED THE CLAIM OF THE ASSESSEE AT LEAST ON ALTERNATE CONTENT ION THAT THE ASSESSEE WOULD BE ENTITLED FOR DEDUCTION UNDER SECTION 80IB(10) ON PRO-RATA BASIS. NO OTHER POINT WAS CONSIDERED AGAINST THE ASSESSEE FOR REFUSING RELIEF UNDER SECTION 80IB(10) BY THE AUTHORITIES BELOW. SINCE WE HAVE HELD ABOVE THAT THE OPEN TERRACE IS NOT PART OF BALCONY/VARANDH THEREFORE ACCORDING TO THE SUBMISSI ONS OF THE ASSESSEE, THE BUILT UP AREA OF THE ASSESSEE WAS WITHIN THE PRESCRIBED LIMIT. THEREFORE, THERE IS N O NEED TO GIVE FURTHER FINDING WITH REGARD TO ALTERNATE CLAIM OF THE ASSESSEE. CONSIDERING THE FACTS OF THE CASE, IN THE LIGHT OF THE ABOVE DECISIONS, WE ARE OF THE VIEW THAT THE AS SESSEE FULFILLED THE CONDITIONS AND REQUIREMENT OF THE SEC TION 80IB(10) OF THE ACT, THEREFORE, THE CLAIM OF THE AS SESSEE FOR DEDUCTION SHOULD NOT HAVE BEEN DENIED BY THE AUTHORITIES BELOW. WE ACCORDINGLY, SET ASIDE THE O RDERS OF THE AUTHORITIES BELOW AND DIRECT THE AO TO GRANT DE DUCTION TO THE ASSESSEE UNDER SECTION 80IB(10) OF THE ACT A S CLAIMED BY THE ASSESSEE. 12. IN RESULT, THE ASSESSEES APPEAL IS ALLOWED. 11. THE SUBSTANTIAL OBJECTIONS OF THE AO HAVE BEEN CONSIDERED IN THE ABOVE CASE WITH REGARD TO THE OWNERSHIP OF THE ASSESSEE BUILDER AND THE APPROVAL IN THE NAME OF THE SOCIETY. WE FI ND THAT THE LEARNED CIT(A) ON DETAILED CONSIDERATION OF THE EVIDENCES A ND MATERIAL ON RECORD RIGHTLY HELD THAT THE ASSESSEE INCURRED EXPE NSES TOWARDS COST OF THE LAND AND ACQUIRED DOMINANT CONTROL OVER THE LAND AND DEVELOPED THE PROJECT AT ITS OWN RISK. THEREFORE, T HE ASSESSEE HAS SATISFIED THE CONDITIONS OF SECTION 80IB (10) OF TH E IT ACT IN THE MATTER. ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 25 WITH REGARD TO THE AREA IN WHICH THE HOUSING PROJEC T HAS BEEN DEVELOPED, THE AO HAS NOT DISPUTED THIS CONDITION A ND THE DVO IN HIS REPORT ALSO CONFIRMED THE AREA OF THE PLOT UNDER CO NSIDERATION AT 10725 SQ. MTRS. MERELY BECAUSE DIFFERENT AGREEMENTS WERE ENTERED INTO WITH INDIVIDUAL PLOT OWNERS IS NO GROUND TO RE JECT THE CLAIM OF THE ASSESSEE. ULTIMATELY, THE ENTIRE AREA OF THE HOUSIN G PROJECT SHALL HAVE TO BE CONSIDERED. SINCE, THE PROJECT IS ON THE SIZE OF THE PLOT OF LAND WHICH HAS MINIMUM AREA OF 1 ACRE, THEREFORE, THE LE ARNED CIT(A) WAS JUSTIFIED IN HOLDING THAT THE ASSESSEE COMPLIED WIT H THE CONDITIONS OF SECTION 80IB (10) OF THE IT ACT. FURTHER, IT WAS FO UND THAT THE RESIDENTIAL UNITS HAVE NOT EXCEEDED THE MAXIMUM BUI LD UP AREA OF 1500 SQ. FT. THE DVO INTIMATED THAT FSI OF EACH FLA T CONSTRUCTED IS LESS THAN PERMISSIBLE LIMIT. IT WAS THE APPREHENSIO N OF THE DVO THAT THE BUYERS OF THE FLATS CAN ADD TO THE BUILT UP ARE A IN THE TERRACE PORTION ETC. THIS WAS MERELY ASSUMPTION OF THE DVO THAT FURTHER CONSTRUCTION CAN BE RAISED IN THE PROPERTY. EVEN TH EN SUCH FUTURE EVENTS CANNOT DENY THE DEDUCTION IN FAVOUR OF THE A SSESSEE BECAUSE AT THE TIME OF CLAIM MADE BY THE ASSESSEE THE MAXIM UM BUILT UP AREA DID NOT EXCEED MAXIMUM PRESCRIBED LIMIT. FURTHER, T HE OBJECTION OF THE AO WAS THAT THE BU PERMISSION WAS GIVEN ON 19-0 3-2009 INSTEAD OF OBTAINING THE SAME ON 31-03-2008, THE ASSESSEE E XPLAINED THROUGH MATERIAL ON RECORD THAT BUILDING CONSTRUCTI ON WAS COMPLETED BEFORE 31-03-2008 AND THE ASSESSEE APPLIED FOR BU P ERMISSION WITHIN THE TIME BUT DUE TO PROBLEM WITH THE LOCAL A UTHORITIES THE BU PERMISSION COULD NOT BE OBTAINED IN TIME. THE LETTE RS OF AMC FILED AS ANNEXURES TO THE IMPUGNED ORDER AND REFERRED TO BEF ORE THE LEARNED CIT(A) CLEARLY SUGGEST THAT BUILDING CONSTRUCTION W AS COMPLETED PRIOR ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 26 TO THE PRESCRIBED DATE AND THE BUILDING WAS UNDER U SE PRIOR TO THE PRESCRIBED DATE AND WITHOUT BU PERMISSION SINCE IT WAS USED, THEREFORE, THE ASSESSEE PAID THE PENALTY. THE MAIN REQUIREMENT OF SECTION 80 IB (10) OF THE IT ACT HAD BEEN THAT SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF HOUSING PROJECT ON OR AFTER 01-10-1998 AND COMPLETES SUCH C ONSTRUCTION, IN CASE WHERE A HOUSING PROJECT HAS BEEN APPROVED BY L OCAL AUTHORITIES BEFORE 01-04-2004, ON OR BEFORE 31-03-2008. THIS PR OVISION WOULD SHOW THAT THE ASSESSEE COMPLIED WITH THE PROVISIONS OF THE LAW BECAUSE IN THIS CASE APPROVAL BY THE LOCAL AUTHORIT IES WAS GRANTED BEFORE 01-04-2004 AND THE ASSESSEE COMPLETED CONSTR UCTION BEFORE 31-03-2008 AND THE SAME IS EVIDENT FROM THE LETTERS OF AMC ATTACHED WITH THE IMPUGNED ORDER. THE CLAIM OF THE ASSESSEE WAS HOWEVER, REJECTED BY CONSIDERING THE EXPLANATION IN WHICH IT WAS PROVIDED THAT DATE OF COMPLETION OF THE CONSTRUCTION OF THE HOUSI NG PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH COMPLETION CERTIFICAT E IS ISSUED BY THE LOCAL AUTHORITIES. THE ASSESSEE HOWEVER, EXPLAINED THE REASONS WHICH WERE MAINLY ATTRIBUTABLE TO AMC FOR NOT ISSUI NG THE CERTIFICATE ON TIME. THE ASSESSEE LATER ON OBTAINED THE BU PERM ISSION AND PRODUCED THE SAME BEFORE THE LEARNED CIT(A). THE LE ARNED CIT(A), THEREFORE, ON PROPER APPRECIATION OF THE FACTS RIGH TLY NOTED THAT CONSTRUCTION OF BUILDING WAS COMPLETED IN THIS CASE AND WAS PUT TO USE ALSO PRIOR TO 31-03-2008. THE DECISION OF THE H ONBLE GUJARAT HIGH COURT IN THE CASE OF GUJARAT OIL AND ALLIED IN DIA (SUPRA) WAS RIGHTLY RELIED UPON IN SUPPORT OF THE FINDINGS OF T HE LEARNED CIT(A). THE HONBLE SUPREME COURT IN THE CASE OF BAJAJ TEMP O LTD. 62 TAXMAN 480 CONSIDERING THE PROVISIONS OF SECTION 80 IA OF THE IT ACT ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 27 HELD THAT PROVISION IN THE TAXATION STATUTE GRANTING INCENTIV ES FOR PROMOTING GROWTH AND DEVELOPMENT SHOULD BE CONS TRUED LIBERALLY. SINCE PROVISION INTENDED FOR PROMOTING A ND ECONOMIC GROWTH HAS TO BE INTERPRETED LIBERALLY, RESTRICTION OF IT TOO HAS TO BE CONSTRUED SO AS TO ADVANCE THE OBJECTIVES OF THE PROVISIONS AND NOT TO FRUSTRATE IT. SINCE IN THE CASE OF THE ASSESSEE BUILDING PERMISSION FOR HOUSING PROJECT WAS GRANTED WITHIN T HE PRESCRIBE DATE AND BUILDING CONSTRUCTION ALSO COMPLETED BEFORE THE PRESCRIBED DATE AND THE BU PERMISSION WAS MERELY ISSUED LATER ON IS ON GROUND TO REJECT THE CLAIM OF THE ASSESSEE. THE LEARNED CIT(A ), THEREFORE, ON PROPER APPRECIATION OF FACTS AND MATERIAL ON RECORD RIGHTLY DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. WE MAY ALSO NOTE T HAT THE ASSESSEE SPECIFICALLY PLEADED BEFORE THE LEARNED CIT(A) THAT IT HAS BEEN GRANTED DEDUCTION U/S 80 IB (10) OF THE IT ACT IN T HE PRECEDING ASSESSMENT YEAR 2005-06, THEREFORE, ON PARITY OF TH E FACTS THE CLAIM OF THE ASSESSEE CANNOT BE REJECTED. NOTHING IS BROU GHT TO OUR NOTICE IF ANY FURTHER APPEAL IS PREFERRED OR FILED IN THE PRE CEDING ASSESSMENT YEAR 2005-06. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES NOTED ABOVE, WE DO NOT FIND ANY INFIRMITY IN THE OR DER OF THE LEARNED CIT(A) IN ALLOWING THE CLAIM OF THE ASSESSEE. IN TH E RESULT, THE DEPARTMENTAL APPEAL HAS NO MERIT AND IS DISMISSED. ITA NO.2447/AHD/2010 ITO, WARD- 9(1), AHMEDABAD VS M/S. TARNETAR CORPORA TION 28 12. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24-05-2011. SD/- SD/- (A. N. PAHUJA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 24-05-2011 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD